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Average Credit Score & Debt in Arizona

The average VantageScore in Arizona is 684. The average household debt is $54,290.

The last of the contiguous 48 states to be admitted to the union, Arizona grew as the result of western expansion. Its economy began back in the mid-1800s with the "five C's": copper, cotton, cattle, citrus, and the climate that made settling the state very attractive for people escaping the harsh winters of the East. Since then, the state has grown to be a major hub of the Sun Belt.

Arizonans’ relationship with debt is a complicated one. The statistics are full of fluctuations, and the state’s issues with debt are as diverse as its population. Let’s take a look at Arizona’s relationship with credit and debt.

Key Statistics

Contents

Arizona’s Average VantageScore Over Time

Year Average VantageScore - AZ
2015 662
2016 718
2017 669
2018 673
2019 675
2020 684

The trend of Arizona’s VantageScore over time has somewhat tracked the national average with a difference between the two of no more than 10 points. Arizona has remained in the “Good” range between 670 and 739, with the exception of 2015 and 2017 when it dipped to 662 and 669, respectively. 

Interestingly, Arizona’s VantageScore spiked to 718 in 2016. It’s hard to pinpoint a single reason for this spike. Rather, several factors converged in 2016 and certainly could have contributed to this spike. In 2016, Arizona’s GDP outpaced projections. Additionally, the Phoenix, Mesa, and Scottsdale areas began to lure tech jobs away from Silicon Valley, and the state boasted the second fastest job growth rate in the country. [1] A positive outlook: Arizona’s economy is strong and rising! https://phoenixchamber.com/2016/10/13/arizonas-economy-is-strong-and-rising/

How Credit Scores in Arizona Compare to Other States

Year Average VantageScore - AZ Average VantageScore - US
2015 662 672
2016 718 726
2017 669 678
2018 673 682
2019 675 684
2020 684 690

From 2019 to 2020, Arizona experienced a significant 9-point increase in average credit score from 675 to 684, the second highest jump in that time period. Only West Virginia had the same 9-point jump. Connecticut is the only state that had a higher jump (10 points) in the same time period.

Arizona is tied with Alaska with a score of 684. Indiana (682) and Florida (680) are right behind Arizona, while Missouri (685), Ohio (687), Delaware (687), and Maryland (688) are just a few points above.

Debt in Arizona

Year Average Household Debt - AZ Average Household Debt - US
2003 37,720 33,430
2004 41,950 37,290
2005 46,190 40,650
2006 55,550 45,410
2007 63,750 50,170
2008 65,870 52,010
2009 60,200 49,820
2010 54,320 47,410
2011 52,210 47,790
2012 48,890 47,020
2013 46,950 45,310
2014 47,230 45,710
2015 47,630 46,000
2016 48,590 46,950
2017 51,300 48,800
2018 53,060 50,090
2019 54,290 51,580

One thing is clear about the statistics for Arizonans’ household debt: The Great Recession hit the state hard. The widest gap between Arizona’s household debt and the national average occurs during the financial crisis that began in 2008. The gap narrows as the state emerges from the recession and returns to its trend of being just above the national average.

According to a 2019 study by the Motley Fool, Arizona ranked fourth among the top 15 states whose residents owe more than they make. Hawaii holds first place, with an $18,025 dollar difference between the per capita debt balance of its residents ($53,060) and their per capita income ($43,650). Arizona’s difference is $9,410. [3] Americans in These 15 States Owe More Money Than They Earn Annually https://www.fool.com/the-ascent/research/americans-these-15-states-owe-more-money-they-earn-annually/

Mortgage Debt

Year Average Mortgage Debt - AZ Average Mortgage Debt - US
2003 27,360 23,740
2004 30,180 26,590
2005 33,770 29,230
2006 42,080 33,400
2007 48,930 37,250
2008 50,220 38,490
2009 45,540 36,810
2010 40,860 35,010
2011 38,000 34,200
2012 34,800 33,230
2013 33,150 31,630
2014 33,070 31,520
2015 33,000 31,330
2016 33,370 31,590
2017 35,680 32,940
2018 36,690 33,680
2019 37,620 34,790

Mortgage debt in Arizona mirrors the trend shown in household debt, which makes sense as the cost of a house often makes up a large percentage of a household’s overall debt. Recently, however, mortgage debt appears to be once more widening the gap between Arizona homeowners and the rest of the country. Arizonans who own their homes saw their average mortgage debt climb 1.4% from 2018 to 2019. [2] Arizonans owe more money than they earn, report says https://www.bizjournals.com/phoenix/news/2019/07/29/arizonans-owe-more-money-than-they-earn-report.html

Arizona was hit hard during the recession of 2008. In Phoenix, homes lost more than 56 percent of their value. [4] 10 Years After Housing Crisis: A Realtor, A Renter, Starting Over, Staying Put https://www.npr.org/2018/04/28/603678259/10-years-after-housing-crisis-a-realtor-a-renter-starting-over-staying-put Interestingly enough, Arizona has rebounded from a debilitating financial crisis and is heading toward an affordable housing crisis. The slowly-widening gap between Arizona’s mortgage debt and the national average can be explained by post-recession wages decreasing, while housing costs are rising. [5] (Un)Affordable: How Did Arizona End Up With A Housing Crisis? https://kjzz.org/content/1118776/unaffordable-how-did-arizona-end-housing-crisis Housing costs in Arizona are on average 7.8 percent higher than the national average. [6] Cost of living in Arizona https://www.bestplaces.net/cost_of_living/state/arizona The median home price in Arizona is $249,300, while the median home price nationally is $231,200.

Another disturbing recent trend is the increase in cash-out refinancing. Arizona currently ranks sixth in the nation in recent refinancing, while 60 percent of recent refinancing is cash-out nationally. [15] Places Taking on the Most Mortgage Debt in America https://www.refiguide.org/which-places-in-america-are-taking-the-most-mortgage-debt/ This type of refinancing is problematic, compared to the act of simply rolling over a mortgage to reduce your payment thanks to a lower interest rate. Cash-out means you're taking the equity in your home in cash, which can help with short-term needs but often leads to refinancing a larger amount with a larger monthly payment. When this occurs just before a recession, like the one we’re in now, it can lead to being underwater on your mortgage. The last time the country saw a surge in cash-out refinancing was the Great Recession of 2008.

Credit Card Debt

Year Average Credit Card Debt - AZ Average Credit Card Debt - US
2003 3,110 2,960
2004 3,170 3,040
2005 2,970 3,060
2006 3,100 3,170
2007 3,590 3,490
2008 3,990 3,670
2009 3,740 3,370
2010 3,270 3,050
2011 3,060 2,950
2012 2,930 2,850
2013 2,740 2,710
2014 2,740 2,730
2015 2,810 2,800
2016 2,930 2,930
2017 3,140 3,100
2018 3,310 3,220
2019 3,460 3,390

The level of credit card debt in Arizona has fluctuated significantly. Coming out of a steep spike during the Great Recession, the level of credit card debt settled back below pre-recession levels by 2013, but then started rising again and continues to rise.

A 2019 study rated Phoenix one of the least sustainable cities with regards to its credit card debt. The study determined it would take almost 4.5 years and cost over $1,000 for an Arizonan to pay off the median credit card debt amount of $2,633. [7] Phoenix Among Cities With Least-Sustainable Credit Card Debt https://patch.com/arizona/phoenix/phoenix-among-cities-least-sustainable-credit-card-debt By comparison, Cupertino, California—the top-ranked city—could pay off roughly the same amount of debt in just over a year.

By contrast, the city of Tempe, Arizona ranked first in the state and 14th nationally for paying down credit card debt. Tempe households reduced their credit card debt by by an average of $2,347 from 2017 to 2018. [8] Consumers in what Phoenix-area cities have highest credit-card debt? And see who's paying it down https://www.azcentral.com/story/news/local/tempe/2019/03/24/tempe-residents-successfully-eliminate-significant-amount-debt/3144582002/

Auto Loan Debt

Year Average Auto Loan Debt - AZ Average Auto Loan Debt - US
2003 3,420 2,960
2004 3,800 3,040
2005 4,030 3,240
2006 4,220 3,360
2007 4,350 3,360
2008 4,190 3,310
2009 3,610 3,030
2010 3,290 2,950
2011 3,330 3,050
2012 3,540 3,270
2013 3,710 3,420
2014 4,050 3,720
2015 4,480 4,070
2016 4,750 4,340
2017 4,890 4,520
2018 5,200 4,700
2019 5,350 4,850

For an expansive state whose public transit options do not extend much beyond the bus and a regional rail system connecting Mesa and Tempe, cars are vitally important. The iconic Route 66 passes through both Flagstaff and Kingman. Unfortunately for Arizonans, the average cost of owning and maintaining a vehicle is seven percent higher for Arizona than it is for the rest of the country. [7] Phoenix Among Cities With Least-Sustainable Credit Card Debt https://patch.com/arizona/phoenix/phoenix-among-cities-least-sustainable-credit-card-debt In a state full of fluctuations, auto loan debt is one area where Arizona consistently ranks above the national average.

Arizona ranks 11th among the states with the most auto loan debt from 2018 to 2019 with a one percent year-over-year increase. [9] Top 10 States With the Highest Average Auto Loan Debt https://www.experian.com/blogs/ask-experian/research/states-with-the-highest-average-auto-loan-debt/ Arizona also has a 4.57 percent delinquency rate for auto loans 90 days or more past due. [10] The 20 states with the most auto loan debt https://azdailysun.com/lifestyles/autos/the-20-states-with-the-most-auto-loan-debt/collection_e9968ebe-731f-573b-93f2-9ce02fb938df.html#10

The Arizona Attorney General gave the state’s consumers some good news in March 2020 when he announced new protections that limited repossessions in response to the COVID-19 pandemic. [11] Major Consumer Protections Announced in Response to COVID-19 https://library.nclc.org/major-consumer-protections-announced-response-covid-19 These restrictions will likely help keep that gap between Arizona’s auto debt and the national average from widening.

Student Loan Debt

Year Average Student Loan Debt - AZ Average Student Loan Debt - US
2003 1,080 1,060
2004 1,520 1,440
2005 1,670 1,610
2006 1,930 1,970
2007 2,170 2,250
2008 2,500 2,670
2009 2,890 3,010
2010 3,220 3,370
2011 3,420 3,620
2012 3,890 4,000
2013 4,030 4,250
2014 4,310 4,490
2015 4,470 4,660
2016 4,690 4,920
2017 4,890 5,130
2018 5,170 5,390
2019 5,260 5,510

Like many other states, Arizona’s student loan debt trend tracks the national average. While Arizona is slightly below the national average, the upward trajectory over time continues and the debt burden of Arizona’s college students rises with it. Arizona students owe an average of $34,712 in student debt. [12] Arizona Student Loans: Debt Stats, Repayment Programs and Refinancing Loans https://studentloanhero.com/featured/arizona-student-loans-refinance/ In a state where the median individual income is around $30,000 [13] Data Commons Place Explorer - Arizona https://datacommons.org/place/geoId/04?topic=Economics#Median%20individual%20income, that’s a problem. One of the factors contributing to this is a small number of public universities in the state. Arizona has a grand total of three: Arizona State, Northern Arizona University, and the University of Arizona. Compare this to a state like Pennsylvania with 58 public university options and you can see how competitive access to lower cost higher education options can get.

Another factor contributing to Arizona’s student debt problem is a paucity of grant options offering too little money to make a difference. Arizona has AZLEAP (the Arizona Leveraging Educational Assistance Partnership) which can offer up to $2,500 per academic year to students who demonstrate financial need. [12] Arizona Student Loans: Debt Stats, Repayment Programs and Refinancing Loans https://studentloanhero.com/featured/arizona-student-loans-refinance/ While this is better than nothing, it’s still a drop in the bucket compared to the total cost of college for a year. Students who do not qualify for this grant are left with either private or state loans to fill in the gap.

An unfortunate consequence of students shouldering this much debt is a high level of default rates on student loans. In 2016, when Arizona’s level of student debt was slightly below the national average, its default rate had inched one percent above the national average (10.8 percent) to 11.45 percent. [14] Arizona Student Loan Default Rates Above National Average https://kjzz.org/content/1288691/arizona-student-loan-default-rates-above-national-average

Sources

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